Federal Reserve chairman warns of 'long road' to recovery for US economy

As the unprecedented outbreak of deadly coronavirus continues to impact the economy, US Federal Reserve Chairman Jerome Powell has cautioned on June 10 that the American economy faces a “long road” to recovery. This came despite the jobs report being positive for May. During the press conference, Powell assured that country’s central bank would continue to support the US economy for “as long as it takes” and also announced that the interest rates offered by the bank would remain near to zero for near future.

Moreover,  a policymaker forecast released by the Federal Reserve revealed that the rates had remained low until the end of 2022. Powell has noted that “this is going to take some time”. Back in December 2019, when the world was still unsure about the novel coronavirus discovered in China, Fed had predicted the American economy to grow by at least two per cent in 2020 and the unemployment rate to be at 3.5 per cent.

Powell, “At the Federal Reserve, we are strongly committed to using our tools to do whatever we can, and for as long as it takes, to provide some relief and stability, to ensure that the recovery will be as strong as possible, and to limit lasting damage to the economy.”

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20 million people lost jobs in US

However, stricken by the deadly COVID-19 pandemic, the Fed policymakers had to face drastic challenges forcing them to rewrite the previous predictions and fueling a loss of more than 20 million jobs in the only US in the months of March and April. But the Fed is trying to help the consumers by keeping the rates low so that businesses in the US can borrow and spend enough to just sustain the country’s economy.

US Federal Reserve Chairman, “Even after the unexpectedly positive May employment report, nearly 20 million jobs have been lost on net since February, and the unemployment rate has risen about 10 percentage points, to 13.3 per cent,” he added.

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